Coalition Urges CMS to Rethink Medicare Prior Authorization Growth

April 14, 2021 - A broad coalition of healthcare industry groups is calling on CMS to reconsider Medicare prior authorization growth among outpatient services set to go into effect this summer.

The 40 groups representing a range of clinicians and medical technology providers—and including industry heavy-hitters like the American Medical Association (AMA), Healthcare Financial Management Association (HFMA), and American College of Surgeons—sent a letter to Acting CMS Administrator Liz Richter voicing strong opposition to prior authorization expansion recently finalized in Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rules.

First, the calendar year (CY) 2020 final rule established a nationwide prior authorization process for five hospital outpatient department services that have cosmetic purposes in addition to therapeutic indications. The process went into effect on July 1, 2020.

Months later, the CY 2021 final rule expanded prior authorization to two new services categories—cervical fusion with disc removal and implanted spinal neurostimulators. These prior authorization processes are slated to go into effect this July 1st.

“We continue to have serious concerns that beneficiaries will experience significant barriers to access to medically necessary procedures as a direct result of the CY 2021 policy,” the coalition stated in the letter.

“We also worry that future expansions of prior authorization will unnecessarily delay access to care for even more beneficiaries and add administrative and cost burden for providers unless appropriate and transparent regulatory processes are established,” the letter continued.

The prior authorization growth via OPPS/ASC final rules has garnered significant criticism from both healthcare industry groups and lawmakers.

Last year, a group of 50 bipartisan Congress members had written to then-CMS Administrator Seema Verma urging her to not finalize prior authorization growth in the CY 2021 OPPS/ASC final rule.

“If finalized, we believe this policy could negatively impact beneficiary access to medically necessary procedures, and we ask you to reconsider,” the group wrote.

The lawmakers also expressed concerns about the expansion of the requirements “without the necessary guardrails to ensure beneficiary access to care is protected.”

Specifically, the group cited concerns from the Medicare Payment Advisory Committee that found CMS lacks the experience in using prior authorization in Medicare and the administrative structure to implement the expanded requirements.

Industry groups—including many signatories of the April 7th letter—had also submitted comments to CMS when the agency proposed to expand prior authorization in Medicare via rulemaking. The groups expressed similar concerns as the Congress members and many outright opposed the proposed expansion.

However, the groups are now saying that CMS did not address those concerns even though the “list of organizations questioning the agency’s actions far exceeded the very few that submitted supportive comments.”

Some groups even presented data to CMS at the time demonstrating that the increases in utilization of impacted services reflected “legitimate medical need.”

The coalition has urged CMS to suspend the prior authorization requirements or at least delay implementation of prior authorization requirements slated to take effect this summer.

Additionally, the coalition asked the agency to withhold any further prior authorization action until it has conducted an analysis of the impact of prior authorization for the five procedures impacted in July 2020, including the extent to which Medicare contractors have been able to meet processing timeframes and the burden the prior authorizations impose upon providers and beneficiaries.

AMA recently found in a separate survey that the burden associated with prior authorizations is high for most physicians, even during the COVID-19 pandemic. Additionally, an overwhelming majority (94 percent) of physicians surveyed said prior authorizations have led to at least some care delays.

Even more troubling, 30 percent of the physicians stated that prior authorization has led to a serious adverse event for a patient in their care.

The coalition also asked CMS to establish specific criteria for implementing future prior authorization requirements using a transparent process involving beneficiary and other stakeholder feedback.